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Giving USA: What Lies Ahead for Philanthropy in America

By Araceli Duran, Business Development Associate

Alford Group hosted a webinar that looked at some of the key findings from the new Giving USA report and invited expert panelists to discuss the current state of giving in the country. Let’s take a look at some of the key findings from the report, how you can incorporate them into your organization’s philanthropic strategy and what our panelists had to say on what the findings reveal. Check out this video for a brief summary of the Giving USA results.

3 Key Takeaways from Giving USA 2022

 

 #1 – Giving reached a record $484.85 billion in 2021

Giving reached a record $484.85 billion in 2021, which is an increase of 4.0% in current dollars. However, after adjusting for inflation, giving actually decreased by 0.7%. Giving remained strong despite the challenges the country experienced in the past year, such as the ongoing Covid-19 pandemic and rising inflation. A lot of that was due to a strong year for the stock market and GDP.

What does this mean for you?

What does that mean for your organization? For starters, how does your data from the past year stack up against the Giving USA report? If you haven’t already, consider how you can benchmark your own organization against the findings from this year’s Giving USA report. Did giving over the past year decline for your organization? Where does the majority of your giving come from? What are the bright spots when it comes to giving for your organization, and where should you be investing your time and energy based on these findings? Let’s take a look at another of the key findings from the report to help answer these questions.

#2 – Giving increased for 3 of the 4 sources of contributions

Giving by individuals, foundations, and corporations all increased in 2021. Giving by individuals makes up the biggest portion of total giving at 67% with a total of $326.87 billion. Individual giving rose by 4.9%, although when adjusted for inflation it stayed relatively flat and only rose 0.2%.

The next largest portion of total giving is giving by foundations, which grew by 3.4% to total 19% of giving. Giving by foundations includes grants made by independent, community and operating foundations, which in 2021 totaled $90.88 billion.

After experiencing a dip in 2020, giving by corporations rebounded and grew by 23.8% (18.3% when adjusted for inflation). Giving by corporations is largely driven by GDP, and given GDP growth over the past year, giving by corporations accordingly increased.

Lastly, giving by bequests totaled an estimated $46.01 billion in 2021. It declined by 7.3% from 2020 and is the only one of the four sources of contributions to experience a dip in the past year. It is important to note here that giving by bequests tends to vary from year to year as a handful of large gifts in one year can greatly impact the overall total.

What does this mean for you?

Again, it’s important to consider how your organization stacks up against these numbers. Did your organization see an influx of corporate dollars given the rebound in corporate giving this year, or is now the time to start thinking about a corporate giving program? How are you continuing to cultivate strong relationships with individual donors? Although giving by individuals has declined as a percentage of total giving over the last 40 years, it still totals 67% of the total giving pie and cannot be underestimated or minimized.

#3 – Several subsectors that experienced a decline in 2020 rebounded in 2021

After experiencing a dip in 2020, the health subsector and the arts, culture, and humanities subsector rebounded in 2021. The health subsector declined -5.7% between 2019 and 2020 and grew 7.7% between 2020 and 2021. The arts, culture, and humanities sector declined -5.6% between 2019 and 2020 and increased 27.5% between 2020 and 2021. Both of those subsectors experienced a rebound as donors returned to their favored causes, as well as the fact that organizations could once again host in-person fundraising opportunities, such as walks and events.

On the flip side, some subsectors experienced a slower level of growth or declined over the past year. The education subsector saw a decline of -2.8% between 2020 and 2021, and the human services subsector did not reach the same heights as it did between 2019 and 2020. During that time span, human services increased 9.3% but only increased 2.2% between 2020 and 2021, resulting in a slower level of growth for the past year. Overall, however, giving remained flat or positive for eight of the nine subsectors over the past two years.

What does this mean for you?

If you were one of the subsectors that experienced a rebound in 2021, how did you weather 2020? What strategies did you put in place to navigate those uncertain and difficult times and which of them will you maintain? Given our constantly shifting landscape brought about by the pandemic and economic challenges, how are you preparing for potential scenarios like an economic downturn or the increasing importance of DAFs as a preferred giving vehicle? How will you continue to adapt during these uncertain times? These are the questions that every organization has to keep top of mind and which the Giving USA report can help you answer.

Panel Discussion: What Lies Ahead for Philanthropy in America

The Giving USA overview was followed by a presentation from Dan Hungerman Ph.D., Professor, Department of Economics at the University of Notre Dame who also shared his take on the Giving USA numbers and what he has uncovered as part of his own research. Dan walked attendees through the current landscape of giving and how the events of the past couple of years have impacted the nonprofit sector. In short, large donors in our current landscape continue to play an increasingly important role in the charitable giving landscape, while more traditional donors face a number of headwinds, such as the ramifications of the passage of the Tax Cuts and Jobs Act in 2017.

Let’s hear from the experts

The expert panel included:

Marco A. Corona, Chief Development Officer at the International African American Museum
Marguerite H. Griffin, Director, Philanthropic Advisory Services at Northern Trust
Daniel Hungerman D., Professor, Department of Economics, University of Notre Dame

The conversation was insightful, informative and engaging, but top of mind for our panelists was how the Giving USA report informs their philanthropic strategy, the role of equity in their line of work and how they are working to engage the current and next generation of donors.

Tell your story

For our panelists, the Giving USA report informs the philanthropic strategy of the donors and clients they work with on a regular basis. They look to the report to reveal giving trends and provide a sense of where shifts might occur in the next couple of years for the philanthropic landscape. For Marco Corona, the latest Giving USA report reveals that there is increasing competition for donors and that it is critical to meet donors where they are at. Many donors are looking to make the most impact with their dollars and it is an area in which practitioners can work with donors to have a conversation around how their money can make a difference at their organization and within the larger community.

Equity and the next generation of philanthropists

Another common theme that our panelists identified is the importance of equity when it comes to working with donors and how critical this is for the millennial and Gen Z generations. As Marguerite noted, millennials have a different relationship to money. They don’t define themselves by their wealth, but how they use it and a desire to be a force for social change. They want to be a positive change in communities and drive more equitable solutions and outcomes.

As we have seen before, we are currently undergoing a powerful transfer of wealth in this country and we cannot ignore our new realities. The current and next generations are looking for transformative and equitable change in their communities and the planet, and it is critical for organizations to be aligned with this shifting landscape.

All in all, these continue to be unprecedented times and stay tuned to this space for future blogs, webinars and insights!

Looking for more details?

Want to see the conversation in full? Check out the full video recording to dive deeper into the Giving USA results, insights into the charitable giving landscape and our lively panel discussion.

All data in this article is from Giving USA 2022: The Annual Report on Philanthropy for the Year 2021, a publication of Giving USA Foundation, 2022, researched and written by the Indiana University Lilly Family School of Philanthropy, unless otherwise noted.

The post Giving USA: What Lies Ahead for Philanthropy in America appeared first on Alford Group.

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